The insurance and funded part of the pension are two important components of pension payments for a citizen of the Russian Federation. It is imperative to understand how the insurance part of the pension is formed, what affects its size and how electronic pension points are calculated.
It is especially important to know all the stages of calculating a pension for those who have a “gray” or low salary, short work experience, unofficial work, or are already preparing for retirement. This information will help you adjust your “work path” and lay the foundations for receiving a good pension.
What are electronic points/e-points
In 2015, a special formula was introduced in the Russian Federation for calculating the insurance part of a pension, based on e-points. An electronic score is a unit introduced to evaluate the work of a Russian citizen. The Pension Fund awards e-points depending on the amount of official salary and the amount of work experience.
To receive a payment, the following conditions must be met:
- collect enough pension e-points;
- reach retirement age;
- accumulate the required amount of work experience.
What are E points?
Recently, information appeared on the Internet that E-points are assigned by a pension fund in a presentation format, but future pensioners were alarmed by the sea of grammatical and syntax errors on the posters.
The funny thing was that on one of the slides after loading it was written very ambiguously that everyone who retires will receive an E-point.
These two indicators have not yet found each other, so rumors about the presentation turned out to be a common joke to defuse the atmosphere around raising the retirement age.
Many pensioners have received information that during the reform, regular points will be gradually loaded into electronic ones. It was reported on the Internet that the download of the slide was provided by the corresponding foundation.
What are the correct names for points in the Pension Fund?
The Pension Fund annually evaluates the work of citizens using special points called the individual pension coefficient. The totality is determined by the abundance and volume of insurance premiums transferred by the employer for the entire period of work of an employed citizen.
The higher the employee’s salary, the more IPC he will earn.
IPC - points that form the amount of future pension payments. The cost of 1 point changes every year by the Government of the Russian Federation. When a citizen reaches retirement age, the coefficients that have been accumulated over all working years are added up. Then, according to a special scheme, the insurance part is calculated.
“E-points” - what are they?
The news about the pension reform caused a mixed reaction among the population. What to expect from the upcoming changes - just an increase in the retirement age or a complete adjustment of calculations?
It is not surprising that information regarding the pension calculation system itself has begun to spread on blogs and social networks. Citizens are informed that when they retire, they will receive not cash payments, but electronic points, which were called “e-points.” Moreover, it is said that this is a statement from the pension fund. As evidence, a single photo of the mythical presentation is published.
However, there is no such news in the news feed of the press service on the official website of the Pension Fund. In addition, the system of accruing pension points has been in effect in Russia since 2015.
We can safely conclude that the information about the introduction of “e-points” is fake.
Other names for pension points
Citizens are often confused when they hear about points that affect their future pension.
The name of the points may vary in different sources:
- e-points;
- electronic;
- pension;
- pension coefficient.
All these concepts are equivalent and imply IPC. It is worth noting that IPC is accrued not only for classic work experience. If a citizen cannot work, having good reason and special circumstances, electronic ones still accumulate. Such periods of incapacity are called socially significant.
These include:
- 1.5 years of parental leave;
- the period when a citizen takes care of a disabled person (1 gr.);
- the period when a citizen is caring for a disabled child;
- length of military service;
- period of care for people over 80 years of age;
- period of absence from work for wives/husbands of military personnel, citizens and diplomats (up to 5 years).
The principle of calculating the pension coefficient
Every year, the Pension Fund awards a citizen a certain number of electronic points, which are directly proportional to his current length of service and salary.
When it’s time for the employee to retire, the Pension Fund will sum up all the accumulated funds and multiply them by a special coefficient. The size of the coefficient changes absolutely every year. It is established by the Government of the Russian Federation and depends on price indexation.
SP = sum of electronic points * price of 1 point + fixed payment
The total number of IPCs can be increased if you come to collect your pension later than the moment when the citizen has reached retirement age. In case of deferred application, the future pensioner will be annually accrued additional coefficients to the existing ones. If a citizen comes for payments, for example, after 5-6 years, then the payment due to him and the IPC will increase by more than a third.
How points are used to calculate pensions
In order for a citizen to receive his insurance portion of payments, he must work continuously for at least 9 years and accumulate at least 13.8 IPC. According to Federal Law No. 400, paragraph 3, article 35, by 2024 the minimum level will increase to 30, but the cost of the pension point will no longer matter.
Future pensioners with work experience before 2015 retained their pension rights by converting their length of service into electronic coefficients. From 2021, working pensioners will receive an increased pension. The adjustment to the pension amount depends on how much the citizen worked officially after reaching retirement age. The maximum possible pension supplement is 3 points.
The law limits the number of IPCs that will be taken into account per year of work.
In 2021, the limit is 8.7. Even if a citizen’s salary, translated into coefficients, is, for example, 10 points for the entire year, only 8.7 of them will be taken into account. From 2021, it is planned to increase the limit on the number of points that can be earned within one year to 10.
What are pension points
Pension points are a coefficient introduced for uniform (proportional) indexation of pensions.
Since it is not possible to predict the exact level of inflation in the future, the Pension Fund recalculates all pension contributions into points, and the Government regularly sets the value of a point taking into account inflation.
Thus, no matter how much prices rise in the future, an increase in the value of a pension point will equally (as a percentage) increase the individual pension amount of each citizen. And this pension size will depend on how many contributions the pensioner made during his working life.
Pension points are awarded for insurance premiums that employers pay to the Pension Fund for their employees. That is, only those citizens who work officially can be provided with pension points.
Pension point cost
From January 1, 2021, to calculate pensions, the state has established the cost of one pension point in the amount of 87.24 rubles.
The specified cost is indexed every year by a percentage equal to the indexation percentage of the insurance pension.
How many points do you need to receive an old-age insurance pension?
To receive an old-age insurance pension in 2021, you must score at least 16.2 points. Every year this figure will increase and by 2025 it will be equal to 30 points without further increase. This rule also applies to early old-age insurance pensions.
| Year | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| Number of points | 11,4 | 13,8 | 16,2 | 18,6 | 21 | 23,4 | 25,8 | 28,2 | 30 |
It is important to know! If the number of pension points is not enough, you will be DENIED from receiving an old-age insurance pension.
How to find out the number of accumulated points
The easiest way to find out how many pension points you have is to look at your personal account statement, which you can request at an appointment with the pension fund or on the State Services portal.
You can also find out the insurance period and the amount of pension savings from the statement.
It should be taken into account that the specified data was not available in the compulsory pension insurance system before 2000, so they are not reflected in the statement.
In addition, you can independently calculate the number of pension points you have accumulated.
Calculation of pension points earned before 2015
Pensioners who are retiring today should be aware that length of service and salary earned before the 2015 pension law reform are also translated into pension points. The law establishes that all rights earned before 2015 are calculated in accordance with the old legislation and are converted into points when assigning a pension.
Calculation of points earned from 2015 to 2021.
To calculate the number of pension points accumulated per year, you need to know the amount of insurance contributions that your employer paid for you to the Pension Fund at the rate established by the state.
There are 2 options for the established tariff:
- Option 1 – from 16% of the insurance contributions transferred by the employer, only the insurance pension is formed
- Option 2 - out of 16% of the insurance contributions transferred by the employer, 10% is sent to the formation of an insurance pension, 6% to the formation of a funded pension.
Maximum annual salary for calculating pension points
| Year | 2015 | 2016 | 2017 | 2018 |
| Wage | 711,000 rub. | 796,000 rub. | 876,000 rub. | 815,000 rub. |
In 2021, the rule applies: when forming only an insurance pension, you can score a maximum of 9.13 points. Therefore, even if the annual salary is 1,000,000 rubles, in accordance with the rules, you cannot earn more than 9.13 points.
Read more about limiting the maximum number of points in different periods below.
Calculation of the number of pension points, example:
Let's give an example of calculating the number of pension points for 2021 with a tariff of 16%, aimed entirely at the formation of an insurance pension.
With a monthly salary of 30,000 rubles. The employee’s salary for the year will accordingly be 360,000 rubles.
The amount of insurance premiums paid from the annual salary is 360,000 rubles. at a 16% tariff it will be 57,600 rubles.
We divide this value by the amount of insurance premiums from the maximum contributory salary paid by the employer at a rate of 16% (in 2021 it is 876,000 rubles)
57,600 ÷ (876,000 × 16%) = 0.41 rub.
And multiply by 10.
0,41 × 10 = 4,1
How much does an e-point cost in 2021?
The cost of the IPC and the mechanism for their indexation determine what size of pensions can be expected in subsequent years.
The value of one point should increase taking into account the consumer price index. For 2015, the cost of the electronic ball was 64.1 rubles, in 2021 – already 78.58 rubles. From January 1, 2018, according to Federal Law No. 420, taking into account indexation of 3.7% 1 = 81.49 rubles.
By law, the cost must increase annually. Such measures on the part of the Government of the Russian Federation should guarantee an increase in the insurance part of the pension, provided that the growth of the pension point does not lag behind the rate of inflation in Russia.
In addition, the size of the future pension directly depends on the citizen himself. An official stable income is one of the guarantors of receiving a good pension. You should avoid employers who evade paying insurance premiums for the organization’s employees, regularly check the amount of accrued contributions in your personal account on the Pension Fund website and monitor whether they are fully taken into account.
How are they recalculated?
After changing the procedure for calculating pensions, many citizens had the opportunity to recalculate it. If, with the new calculation method, the size of a citizen’s pension becomes smaller, then he will be left with the same accruals.
IPC accumulated before January 1, 2015 are converted into rubles at a rate of 64.1 rubles. Every year the cost of the coefficient changes upward. The cost of a pension point in 2021 increased to 81.49 rubles compared to 78.58 rubles last year and 74.27 in 2021.
The number of IPC required to receive pension accruals in 2019 must be at least 13.8 (in 2021 - 11.4; in 2021 - 9 points). In all subsequent years, this number will increase by 2.4 points. Thus, those who will apply for a pension in 2021 will need to have 10 years of experience and 16.2 points.
In 2025, the length of service will be 15 years, and the required number of pension coefficients should reach 30.
